Today’s Sorrell v. IMS Health Inc. is a complicated case; I think the majority (the conservatives plus Justice Sotomayor) is basically right, but I don’t want to focus on the details of this particular case right now. Instead, I want to talk about what this case means to a much broader question having to do with the First Amendment and commercial advertising: May commercial advertising be generally restricted on the grounds that it might persuade people to do something that the government thinks is bad (as opposed to on the grounds that it’s false, or misleading, or improperly intrusive on its listeners, or some such)?
The Court had left this question unresolved for quite some time, but it looks like Sorrell might strengthen the case that the answer is “no” (at least setting aside the special case of speech that urges an unlawful commercial transaction). Let me chart the history of the debate.
1. From 1942 until the mid-1970s, the Supreme Court took the view that commercial advertising is entirely excluded from First Amendment protection. But in Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc. (1976), the Court held that such advertising is generally protected (though less so than other speech). The case involved a ban on price advertising by pharmacies, and the government argued that such price advertising would lead people to go to the lowest-cost pharmacists, who would in turn provide less service; and other pharmacists would likely be lead by competitive pressure to have to similarly provide low cost and less service. But the Court disagreed: Under the First Amendment, speech can’t be restricted because it will persuade people to do something that’s supposedly harmful. “[The choice] between the dangers of suppressing information, and the dangers of its misuse if it is freely available, [is one] that the First Amendment makes for us. Virginia is free to require whatever professional standards it wishes of its pharmacists; it may subsidize them or protect them from competition in other ways. But it may not do so by keeping the public in ignorance of the entirely lawful terms that competing pharmacists are offering.”
2. Linmark Assocs v. Township of Willingboro (1977) took a similar view. The township had banned the posting of “For Sale” signs, apparently to limit white flight. The Court disapproved of this, because “The Township Council here, like the Virginia Assembly in Virginia Pharmacy Bd., acted to prevent its residents from obtaining certain information…. The Council has sought to restrict the free flow of these data because it fears that otherwise homeowners will make decisions inimical to what the Council views as the homeowners’ self-interest and the corporate interest of the township: they will choose to leave town.” And this, the Court said, was unconstitutional, because (quoting Virginia Pharmacy), “this kind of choice, between the dangers of suppressing information, and the dangers of its misuse if it is freely available, [is one] that the First Amendment makes for us.”
3. But then came Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n (1980). The case reached a speech-protective result, and announced a famous four-part test that the Court has since largely cited in commercial advertising cases. But behind the result lurked the endorsement of the principle that the government may indeed restrict speech because it might persuade people to do bad things.
In Central Hudson, the Public Service Commission of New York banned “all advertising that ‘promot[es] the use of electricity,’” reasoning in part that such advertising would persuade listeners to use more electricity, and would interfere with “the State’s interest in energy conservation.” And Justices Brennan, Blackmun, and Stevens would have rejected this argument on the Virginia Pharmacy grounds that I described above. But a five-Justice majority seemed to take the view that a restriction that was limited to advertising that indeed promoted wasteful uses of electricity would be constitutional. “[T]he State’s [substantial] interest in energy conservation is directly advanced by the Commission order at issue here. There is an immediate connection between advertising and demand for electricity. Central Hudson would not contest the advertising ban unless it believed that promotion would increase its sales. Thus, we find a direct link between the state interest in conservation and the Commission’s order.” The majority struck down the law only because it concluded that the law also banned advertising of “electric devices or services that would cause no net increase in total energy use.” So restricting commercial advertising because it might persuade people to do harmful things was constitutional under the majority’s view, so long as the restriction was indeed limited to persuasion to do harmful things and didn’t cover persuasion to do harmless things.
4. Posadas de Puerto Rico Associates v. Tourism Co. of P.R. took this Central Hudson reasoning even further, upholding a ban on commercial advertising of (lawful) casinos in Puerto Rico, reasoning that such a ban was a permissible way of decreasing gambling by Puerto Rico residents whom the advertising might persuade to gamble.
5. But then in 44 Liquormart, Inc. v. Rhode Island (1996), four Justices (Stevens, Kennedy, Thomas, and Ginsburg) returned to the Virginia Pharmacy approach, and took the view that a commercial advertising restriction — there, a ban on price advertising of alcohol — couldn’t be justified on the grounds that the speech might persuade people to do bad things (e.g., drink more alcohol). And Justice Thomas made this more explicit, arguing that, “In cases such as this, in which the government’s asserted interest is to keep legal users of a product or service ignorant in order to manipulate their choices in the marketplace, the balancing test adopted in Central Hudson, should not be applied …. Rather, such an ‘interest’ is per se illegitimate and can no more justify regulation of ‘commercial’ speech than it can justify regulation of ‘non-commercial’ speech.”
But four other Justices (Rehnquist, O’Connor, Souter, and Breyer) did not endorse this view, though they ultimately concluded that the restriction was still unconstitutional even under Central Hudson. And Justice Scalia expressed uncertainty about which approach was right, but concluded that there was no need to decide that in that case. Still, Posadas, at least, was overruled; both the Stevens bloc and the Rehnquist bloc agreed to that, and Scalia said nothing on the subject.
6. In Thompson v. Western States Medical Center (2002), a five-Justice majority (Scalia, O’Connor, Kennedy, Souter, and Thomas), seemed to endorse the Stevens opinion in 44 Liquormart (though Stevens himself was in the dissent in Thompson, joined by Ginsburg as well as Rehnquist and Breyer). In striking down a ban on advertising of pharmacy-compounded drugs, the Court concluded that one of the government’s concerns “amounts to a fear that people would make bad decisions if given truthful information about compounded drugs. We have previously rejected the notion that the Government has an interest in preventing the dissemination of truthful commercial information in order to prevent members of the public from making bad decisions with the information.” But the scope of this conclusion wasn’t clear (might it have applied only to purely paternalistic laws that seek to prevent supposed harm to the listeners themselves, as opposed to harm caused by the listeners’ reliance on the advertising), and this was just one majority opinion, arrayed against the still not overruled Central Hudson opinion.
7. Now we get to Sorrell v. IMS Health Inc.. The law here (to oversimplify) restricted the conveyance of certain information to pharmaceutical companies, and the use of that information by pharmaceutical companies in promoting their products to particular doctors. Part of the state’s argument was that such use of information would lead doctors to prescribe medicines that were too expensive and not sufficiently beneficial. (The law was not limited to a ban on misleading speech to doctors, or even a requirement that certain disclosures be made alongside the sales pitch.) And the six-Justice majority disagreed:
The State contends that §4631(d) advances important public policy goals by lowering the costs of medical services and promoting public health. If prescriber-identifying information were available for use by detailers, the State contends, then detailing would be effective in promoting brand-name drugs that are more expensive and less safe than generic alternatives….
While Vermont’s stated policy goals may be proper, §4631(d) does not advance them in a permissible way…. The State seeks to achieve its policy objectives through the indirect means of restraining certain speech by certain speakers — that is, by diminishing detailers’ ability to influence prescription decisions.
Those who seek to censor or burden free expression often assert that disfavored speech has adverse effects. But the “fear that people would make bad decisions if given truthful information” cannot justify content-based burdens on speech. “The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good.” These precepts apply with full force when the audience, in this case prescribing physicians, consists of “sophisticated and experienced” consumers. [The Court here cited, among other cases, Virginia Bd. of Pharmacy, Linmark Associates, and the Stevens 44 Liquormart opinion. -EV]
As Vermont’s legislative findings acknowledge, the premise of §4631(d) is that the force of speech can justify the government’s attempts to stifle it. Indeed the State defends the law by insisting that “pharmaceutical marketing has a strong influence on doctors’ prescribing practices.” This reasoning is incompatible with the First Amendment. In an attempt to reverse a disfavored trend in public opinion, a State could not ban campaigning with slogans, picketing with signs, or marching during the daytime. Likewise the State may not seek to remove a popular but disfavored product from the marketplace by prohibiting truthful, nonmisleading advertisements that contain impressive endorsements or catchy jingles. That the State finds expression too persuasive does not permit it to quiet the speech or to burden its messengers.
I set aside here the State’s other interests, which focused on the supposed intrusion onto doctor’s privacy as a result of the practices that the law restricted; the Court dealt with those elsewhere in the opinion. Here I want to talk about the more commonly recurring issue of restrictions justified by a worry that listeners will be persuaded by the commercial advertising and will do bad things as a result.
And as to this issue, the Virginia Pharmacy approach now seems to have become the dominant view in Supreme Court opinions — given the most recent decisions on the subject, Thompson and Sorrell — and the Central Hudson approach, while not expressly overruled, has become the outlier. I would now feel much more comfortable arguing to lower courts that the government generally may not restrict commercial advertising out of a worry about its persuasive effects, at least unless the advertising is misleading or promotes an illegal commercial transaction (or perhaps involve some special circumstances, such as an underage audience).
Kent Scheidegger says:
A First Amendment right to advertise has important implications for the drug legalization debate. Create a legal, private industry selling marijuana or cocaine and you create a right for that industry to promote that product as a positive good. We have seen it with cigarettes, with tobacco companies selling men on the idea that smoking makes them macho and selling women on the idea that smoking makes them liberated.
Even those who generally favor private enterprise over government-run things should seriously consider making government the sole legal seller of such drugs, as it is the sole legal retailer of distilled spirits in some states and the sole legal supplier of the
June 23, 2011, 2:21 pmnumbers racketlottery in most.David M. Nieporent says:
Word missing; I’m assuming they banned it.
[Fixed, thanks! -EV]
June 23, 2011, 2:28 pmSoronel Haetir says:
So how does this square with the bans on brothel advertisement in Nevada? Or an even nastier question, Nevada brothels advertising in other
I’m not sure how much the current limitations on tobacco ads are really instructive since I believe they are mostly the industry agreeing to something in hopes of not getting saddled with something worse. And in that context they haven’t been trying real hard to get the limits overturned. And even if they did it might run into the protection of minors issue that Prof Volohk mentioned.
I do find it interesting that at the same time tobacco ads have become so limited that alcohol has expanded greatly, to the point that ads for spirits are now fine on radio and TV.
June 23, 2011, 2:39 pmJJ says:
And who says it is not a positive good? You? the gov’t? In what way is legal marijuana marijuana any less of a “positive good” than alcohol? Or are you in favor of returning prohibition, as well?
June 23, 2011, 2:46 pmRobert says:
I remember the Puerto Rican casino ad decision used the logic of “lesser included”: that it was permissible to ban the advertising of something because it was permissible to ban the thing itself, even though by permitting casinos but not allowing them to be advertised locally, the implication was that it was worse for Puerto Ricans to gamble than for tourists to do so.
The PSC decision must’ve been funny when you take into account that the utility wanted to sell more electricity, which it must’ve been confident it could supply. And if the state says the generation of electricity is noxious, then they’re simultaneously saying it’s a good and a bad.
June 23, 2011, 2:58 pmmikeyes says:
That state’s argument that drug reps lead physicians to prescribe more expensive if not more effective medications is well proven over the years and the drug reps are at the center of this dynamic. Misleading speech is not even needed, all you have to do is ask the doctor to lead a discussion group and give them a free meal.
Studies have shown that the physicians who lead the talk are the ones who increase their use of the medication, not the ones who attend otherwise. The drug companies know this, but it is also common knowledge in the medical literature. This is the true focus of the drug companies, to identify those physicians who are vulnerable to change and to change them. Date mining is one way, reps who are good at their job already know who they are and how to make the switch occur. Play to some doctor’s egos and they will go anywhere, especially if you throw in some free food. Mining just makes it a little easier to accomplish. It is up to the physicians to correct this if they want to really make a difference, not the legislature. Banning data mining only shifts the methods, not the results.
I have to agree with the court’s decision because not only does the law restrict some rights, but it is also ineffective. Drug reps are annoying but I don’t need a law to keep them from my door. All I had to do is to have my nurse tell them to go away. I did so because I was irked when I found out that the pharmacists were selling information on my prescribing practices – the drug companies or data companies pay them for the information – so my response was to not talk to a rep, ever.
Date mining has been going on for over 20 years and still most physicians don’t see the relationship between the rep and the attention paid to the docs. The AMA should be touting how doctors are being manipulated and how new drugs don’t necessarily work any better than ones on the $4 list at Target. Instead they are complicit silent partners in the mining of data for drug companies. The onus is on the medical establishment to fix a real problem that adds to the cost of medicine and possibly can harm patients. That’s another reason I am not an AMA member.
June 23, 2011, 3:03 pmRobert says:
The state’s imprimatur on the product is to make it appear less legitimate?
June 23, 2011, 3:11 pmRobert says:
mikeyes, then what about the practice of supplying liquor to reporters at press conferences? (Or is that passe?)
June 23, 2011, 3:14 pmDavid M. Nieporent says:
Greater New Orleans Broadcasting impliedly overrules Posadas, although I guess technically the latter is still good law.
[EV says: 44 Liquormart expressly overruled Posadas.]
June 23, 2011, 3:18 pmDilan Esper says:
I don’t particularly think there’s much harm done from advertising pot (we already have that with medical marijuana in California), but even if I did think there was something wrong with it, this comment just points towards a little socialism. Have a government monopoly on distribution and you get around the First Amendment problems.
June 23, 2011, 3:18 pmEugene Volokh says:
Dilan Esper: Isn’t that exactly what Kent Scheidegger was saying?
June 23, 2011, 3:22 pmmikeyes says:
Probably just as effective. The studies that were done with physicians showed two things; 1) that doctors who were targeted increased the use of the medication in question (by hundreds of thousands of dollars/month in some cases) and 2) universally these doctors did not believe that they were influenced at all by the machinations of the reps and drug companies even when confronted with hard numbers of sales increases. The latter point was especially true of the so-called “thought leaders” such as academics and well respected leaders in their field who were often paid to give lectures on the subject of what drugs to use.
The drug companies are all business and if something works, they use it. If it is banned (free pens, for instance) they simply find another way. The VT law would have solve nothing and it intruded on certain rights in the process but I suppose it made people feel good while it lasted.
Based on this research, I suspect that liquor worked wonders for the White House press in years past and that the reporters would tell you the same thing about being immune to suasion.
June 23, 2011, 3:54 pmAdam says:
Maybe, but the alcohol example isn’t a good one. It hasn’t worked well there.
June 23, 2011, 4:02 pmJMS says:
As a question, in 44 Liquormart did the Court address the issue of how, if at all, Sec. 2 of the 21st Amendment relates to other constitutional rights? Specifically, can a state or local government create prohibitions on speech concerning the sale of alcohol that would not generally be permissible with respect to other types of commercial speech?
[EV says: Why not look at 44 Liquormart for yourself?]
June 23, 2011, 4:12 pmTed says:
Is this really correct? Does “industry,” — defined, I guess, as corporations or industry associations — really lack a right to promote a product as a positive good until that product is legalized? For instance, does a pharmaceutical company or a pharmaceutical advocacy group currently lack the right to disseminate true information about the positive good effects of marijuana? If so, this country is a lot scarier (and a lot less free) than I thought…
June 23, 2011, 4:35 pmShelbyC says:
Dilan was paraphrasing Kent’s comment, no?
[EV says: I'm not sure what he was trying to do; he began by expressing his own view ("I don’t particularly think there’s much harm done from advertising pot (we already have that with medical marijuana in California)"), and then suggested what Kent's comment supposedly pointed to -- which puzzled me, given that Kent outright said it, rather than pointing to it. But maybe I'm confused.]
June 23, 2011, 4:40 pmNumber 2 says:
Likewise the State may not seek to remove a popular but disfavored product from the marketplace by prohibiting truthful, nonmisleading advertisements that contain impressive endorsements or catchy jingles. That the State finds expression too persuasive does not permit it to quiet the speech or to burden its messengers.
What implications does this have for the restrictions and requirements for cigarette advertising and packaging that Congress just imposed?
June 23, 2011, 4:41 pmKent Scheidegger says:
True enough. The First Amendment right exists regardless. Rephrasing my original point more precisely, allowing a legalized pot industry creates entities with both an economic incentive and a revenue stream to encourage greater consumption of that product along with their First Amendment right to do so.
For those who favor legalization but recoil at my suggestion, would you nonetheless agree to it if it were the compromise that made repeal of prohibition politically possible?
June 23, 2011, 4:46 pmDavid M. Nieporent says:
Thanks.
June 23, 2011, 4:59 pmDavid M. Nieporent says:
No, it doesn’t lack that right — but it can’t advertise it for sale if it’s illegal. (Commercial speech is speech which proposes a commercial transaction.)
June 23, 2011, 5:08 pmTed says:
I think I would favor legalization with state-run dispensaries over blanket non-legalization. But that’s pure balancing/compromise. I don’t see any legitimate reason for a state-run monopoly or state-sanction oligopoly, as with alcohol distribution. Seems to me, the private sector can handle production and distribution more efficiently, so long as the product is regulated appropriately by the government.
June 23, 2011, 5:09 pmTed says:
Of course. I just didn’t equate Kent’s “right for that industry to promote that product as a positive good,” with advertising a product for sale. But I see nothing impermissible about promoting the products good qualities and stating that it should be for sale. Take for instance a billboard purchased by a legal medical marijuana grow operation:
“Marijuana makes life better. Everyone has a right to a better life. Everyone should have a right to buy or grow marijuana. Call your congressman today.”
Seems fine to me.
June 23, 2011, 5:16 pmKent Scheidegger says:
BTW, my comments in this thread are a personal frolic and detour and not a statement on behalf of my employer, which has taken no position either way on these questions.
June 23, 2011, 5:31 pmLyle Habbershaw says:
Of course the government can restrict commercial speech simply because it may advocate or encourage you to do something it is against.
Can cigarettes still be advertised on TV? Not sure if they are outright banned or if it’s an industry choice not to advertise or accept the advertisements.
And government mandating or forbidding certain content in advertisements or packaging can be seen as a restriction on 1A rights as well in my opinion.
June 23, 2011, 5:36 pmJohn Burgess says:
Robert asked:
Yes, it’s largely passe. Reporters don’t drink anywhere near what they used to drink in the past. Further, major media have conduct policies that prohibit reporters from taking any emolument–including drinks and meals–from a party they may be reporting on. Non-alcoholic beverages are the norm now for press conferences. (Artistic endeavors like show or film openings follow a different dynamic, however.)
Oddly enough, this low- to no-drinking by reporters change has been pretty much international. There are still regions in which a reporter will happily slurp down whatever alcoholic beverage is offered, but in the developed world, that’s just no longer the case. There are, of course, alcoholic reporters who don’t follow the trend or rules, but they tend to be not terribly useful reporters, from the POV of the information provider.
June 23, 2011, 5:45 pmMatthew Carberry says:
Since (IMO) the burden of proof is on the person supporting regulation (freedom being the rational default position in all human activities, in this country in particular, until evidence that regulation will have a demonstrable benefit is shown); shouldn’t some study or something supporting the idea that the (significant) minority of states which directly control liquor sales have significantly fewer societal problems with alcohol than the majority of states with private ownership do be presented?
There is no such evidence as far as I’m aware, so on what basis should we assume that state control (with associated tax and other costs to society as demonstrated in PA) should be the default?
June 23, 2011, 5:58 pmmyron says:
And who says it is not a positive good? You?
Yeah Kent, look, I’m black and many black people feel that loosening up with some weed is really the only way to deal with the oppression we face daily. (In our community, the “gateway” thing doesn’t apply; we have weed smokers and crack users, and the two groups are generally separate.) So do you want to deny the new clinics from advertising to us?
June 23, 2011, 7:27 pmEvening round-up at the nclawtalk blog says:
[...] Journal’s Health and Business Blog, the Associated Press, Vermont Public Radio, and the Volokh Conspiracy all also have coverage. [Disclaimer: Goldstein, Howe & Russell represented the data-mining [...]
June 24, 2011, 2:01 amKent Scheidegger says:
One more note of clarification. I do not hold up the overall scheme of regulation of alcohol as an example of success or a model to be emulated. Quite the contrary, I think the system has grave deficiencies. Advocates of legalization are shooting themselves in the foot, IMHO, when they say pot should be regulated just like alcohol or tobacco.
Myron, I don’t see how selling weed out of government stores that do not advertise would inhibit your ability to “loosen up” in the slightest. In most of the country, where are no legal sales at present, my suggestion would allow “loosening up” without engaging in an illegal transaction.
June 24, 2011, 11:20 amHouston Lawyer says:
How did the government ever avoid weighing on the “tastes great” “less filling” advertising.
June 24, 2011, 12:25 pmTamara Piety says:
E – In think your recap of this case and discussion of the cases which follow illustrate the power of framing. At the very beginning you took a couple items out of the equation which are extremely significant with respect to commercial speech – capacity to mislead and intrusiveness. ["(as opposed to on the grounds that it’s false, or misleading, or improperly intrusive on its listeners, or some such)"]. Framing this issue as one about “information” suppression or persuasive effect activates people’s desire for control and autonomy. However, I think an alternative (and completely fair) reading of the issue is that it was the Vermont statute which allowed doctors more autonomy and control. The statute didn’t forbid the practice of data collection. It forbade the practice of data collection *absent consent* of the prescribing doctor. Some doctors wanted such a rule and I submit one of the reasons that they wanted such a rule is that they know that much marketing does not involve the conveyance of information as such. Rather, it often involves manipulation. Data mining advantages the seller by giving the seller something the buyer may not want it to have. Now of course because it was an opt-in default rule many buyers (doctors) might not have thought about the issue one way or another. But an opt-in rule certainly allows everyone who wants it the opportunity to let the drug companies collect this information to have while protecting those who don’t or who haven’t thought about it from the intrusiveness of the practice. So what constitutes “improper intrusiveness” was, I argue, a part of the case. Moreover, as noted, a great deal of advertising is persuasive not because of its informational content but because of its manipulation of listeners’ emotions, cognitive biases, adherence to social conventions, etc. Arguably, the persuasive effect then is based not on the superiority of the ideas but on the tactics and is therefore misleading. People and entities with something to sell, especially the largest ones, have the time, money and incentive to make a deep study of the psychology of persuasion in order to learn of and employ the full battery of techniques to stimulate sales. Their targets, consumers, (or in this case doctors prescribing drugs) might rationally decide that since they have better things to do in their lives than figure out how to counter these efforts just shield themselves from all such persuasion attempts as one of the comments above reflects.
June 24, 2011, 3:54 pmThe Vermont statute supported such decisions and further would require that the permission for the exploitation of information about prescribing practices be a voluntary decision on the part of the doctor rather than a solitary act. It seems to me that the Vermont statute was far more protective of autonomy and freedom of choice than the Court’s decision to strike that decision down.
John David Galt says:
What I find troubling is the “consent decree” form of regulation, where (on this topic) what amounts to a meritless* but well-funded SLAPP suit (many states vs. some big tobacco companies) has produced speech restrictions, even on companies that weren’t defendants, which would almost certainly be overturned on the same grounds as 44 Liquormart if they had been enacted by statute.
* Meritless because anybody who hasn’t been living in a cave since before the Surgeon General’s report (1962?) has known all about tobacco’s harmful effects ever since. At which point the choice to use it (and the responsibility) is his own, if he’s an adult.
It’s especially troubling now because the Obama administration is looking for and finding ways to use this new form of regulation on other topics, from the environment to labor relations. If the courts let him get away with it, we will no longer have the rule of law.
June 24, 2011, 6:55 pm